Budget airline Monarch has warned profits will be down 35 per cent this year though summer bookings are currently up 40 per cent year-on-year.

The airline, which recently secured a new £165 million funding deal from its private equity owners Greybull Capital just hours before a deadline to renew its Air Travel Organiser’s Licence (Atol), said full year earnings will fall to £48 million in 2016 in what was a “particularly challenging year”.

However the airline said summer bookings are helping its recovery and it is “well positioned to weather ongoing industry challenges”.

Monarch chief executive Andrew Swaffield said: “In the face of what is arguably the toughest trading environment ever faced by the industry, Monarch has maintained its profitable performance.

“The record investment in the business announced in October, enhanced marketing initiatives including our first TV advertising campaign in three years and continuing cost control means Monarch enters 2017 in a strong position.”

Monarch was saved in 2014 with a £125 million rescue deal which saw Greybull Capital take a 90 per cent stake in the company.

In June Monarch announced it was looking to secure £35 million in additional facilities from outside lenders or shareholders “to cover reasonably possible downside trading scenarios and commitments to stakeholders”.

Uncertainty over this funding at the end of the 2015 financial year led the auditors to include an emphasis of matter - going concern warning in the annual accounts, though the directors stated they expected the additional financing would be provided.

Monarch reported pre-tax profits of £25.7 million for the 2015 year to October against a loss of £210.1 million the prior year following a “significant restructuring”.

The £165 million financing deal secured in October, the largest investment is has received in its 48-year history, it will also see it take delivery of the first of 30 Boeing 737 MAX-8 aircraft in 2018 with options for a further 15 planes.